Asked by Abdullah Ghzzai Ghazi Albeladi on May 12, 2024
Verified
First-stage allocations in an ABC system should not be based on the opinions of employees about how costs should be distributed among activity cost pools.
First-Stage Allocations
The process of assigning overhead costs to different departments or cost pools as a first step in allocating costs to individual products or services.
ABC System
Refers to Activity-Based Costing System, a method of assigning costs to products or services based on the resources they consume.
Activity Cost Pools
Pools of indirect costs in accounting, classified according to the activities that drive those costs.
- Acquire knowledge on the procedures involved in the establishment and implementation of an Activity-Based Costing (ABC) system, focusing on both the primary and secondary allocation steps.
Verified Answer
Learning Objectives
- Acquire knowledge on the procedures involved in the establishment and implementation of an Activity-Based Costing (ABC) system, focusing on both the primary and secondary allocation steps.
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